In a significant development for the crypto industry, Republican Congressman Matt Gaetz is set to introduce a new bill allowing federal income tax payments to be made using Bitcoin (BTC).
Gaetz believes that by allowing taxpayers to utilize Bitcoin for their federal tax obligations, the country can foster innovation, enhance efficiency, and provide greater flexibility to American citizens.
The proposed legislation aims to amend the Internal Revenue Code of 1986, directing the Treasury secretary to establish a framework for accepting Bitcoin as a valid form of payment.
Inspiration From El Salvador?
In a statement to The Daily Wire, Gaetz expressed his belief that this step is crucial in shaping a future where digital currencies play a significant role in the financial system, ensuring that the United States remains at the forefront of technological advancement.
This move by Gaetz follows his recent visit to El Salvador to attend President Nayib Bukele’s second inauguration, where the country became the first nation to adopt Bitcoin as legal tender.
Gaetz, an ally of former President Donald Trump, has aligned himself with the former president’s stance on cryptocurrency. Trump recently voiced his opposition to President Joe Biden’s “war on crypto” and pledged to support the growth and development of crypto and Bitcoin within the United States.
Gaetz’s Bitcoin Tax Bill
The bill proposed by Gaetz would empower the Treasury secretary to establish regulations necessary for accepting payments in Bitcoin for certain federal taxes.
The legislation also calls for the immediate conversion of received Bitcoin amounts to their equivalent value in dollars after transactions. The bill emphasizes the resolution of tax-related matters by the Secretary without the involvement of financial intermediaries.
While the Internal Revenue Service (IRS) already mandates the reporting of digital asset transactions and the payment of taxes on crypto-related income or gains, Gaetz’s bill seeks to modernize the tax system by officially allowing federal income tax payments to be made with Bitcoin.
The proposed legislation also acknowledges the growing trend among some states, such as New Jersey, Kentucky, and Colorado, to implement their crypto tax regulations, including accepting cryptocurrency as a means of tax payment.
If enacted, Gaetz’s bill would mark a significant milestone in integrating cryptocurrencies into the mainstream financial system, providing taxpayers with an alternative method of fulfilling their federal tax obligations.
As the bill progresses, its potential impact on the broader adoption of digital currencies and the evolving regulatory landscape surrounding cryptocurrencies will draw significant attention from industry stakeholders and the general public.
At the time of writing, BTC is trading at $61,400, rebounding from Monday’s dip towards the $58,400 mark and gaining over 2% in the past 24 hours.
Featured image from Shutterstock, chart from TradingView.com